FUEL SUPPLIER VICTORIOUS AGAINST STATION OWNER FOR UNPAID INVOICES & BREACH OF RETAIL SALES AGREEMENT
- Based on its expertise in contract law and business litigation, Cummins & White successfully represented a Shell fuel supplier in complex litigation when it sued a station for unpaid invoices and damages caused when it stopped purchasing fuel, as well as defended a cross complaint concerning property improvement incentives.
- During Mr. Wakefield’s skilled cross-examination, the defendant admitted he owned other Shell stations, was familiar with the incentive program, and knew that payments weren’t made until construction was done.
- The jury awarded the fuel distributor more than $580,000 plus legal fees on its breach of contract claim. No damages were awarded on the cross complaint.
James Wakefield of Cummins & White, LLP, secured a jury verdict of more than $580,000 for a Shell fuel distributor who sought payment from a station owner for unpaid invoices and damages caused when the owner
stopped purchasing gasoline from the distributor pursuant to a retail sales agreement. Mr. Wakefield also defended the fuel distributor in a cross complaint relating to property development incentives. No damages were awarded in the cross complaint.
In 2008, Frydoun Sheikhpour and his company, Fry’s 57 Freeway Investment, LLC, purchased a gas station in Diamond Bar, California. As part of the sale, the company assumed an existing retail sales agreement (RSA), which required that Shell gasoline be sold exclusively at the station, and that a minimum of 300,000 gallons be purchased from Shell each month. An Incentive program from Shell for facility improvements was in place at the time of the sale. In 2010, Shell assigned its interest in the RSA to Anabi Oil Corporation, a gasoline retailer and Shell fuel distributor, which proceeded to provide Shell gasoline to the station.
During this time period, Mr. Sheikhpour stopped paying for fuel deliveries from Anabi Oil, accruing an unpaid balance of more than $20,000. He also began—but did not complete—improvements to the station, and was in dispute with Anabi Oil (on behalf of Shell) about $500,000 in incentive payments he was supposed to receive when construction was complete. Because of the dispute, Mr. Sheikhpour closed the business and stopped purchasing Shell gasoline, impacting Anabi Oil, as it was under a 10-year contract with Shell to provide fuel to the station.
Anabi Oil retained Cummins & White, LLP, to sue Mr. Sheikhpour for the unpaid invoices, as well as for substantial damages associated with the breach of the RSA. Mr. Sheikhpour responded with a cross complaint in relation to his demand for payment of the property development incentives due from Shell.
Cummins & White represented Anabi Oil in complex litigation that included participation in mediation and negotiation of a settlement agreement. However, the settlement unraveled quickly, as Mr. Sheikhpour did not comply with terms, stymied additional efforts to resolve issues, and was unable to fulfill the obligations he had agreed to.
When it was clear that a formal settlement was unreachable, the case proceeded to trial, during which Mr. Wakefield pursued a strategy that included:
- Establishing Mr. Sheikhpour’s contractual obligation to sell only Shell fuel (with a monthly minimum) as per the RSA (fuel to be provided by Anabi Oil).
- Seeking full restitution of unpaid invoices for delivered gasoline, as well as liquidated damages created when Mr. Sheikhpour stopped purchasing fuel from Anabi Oil.
- Presenting a defense in connection with claims about the incentive program and construction plans and permits, establishing that Mr. Sheikhpour did not complete renovations and so could not have been harmed.
After a one-week trial that included witness testimony and presentation of evidence, the jury awarded Anabi Oil more than $580,000, plus legal fees and costs in its breach of contract claim against Fry’s 57 Freeway Investment and Mr. Sheikhpour. In addition, despite seeking more than $2 million in the cross complaint, the jury awarded no damages to Mr. Sheikhpour.
Mr. Wakefield said the verdicts were important victories for Cummins & White’s long-time client. “Mr. Sheikhpour did not complain about the incentive programs for years. After later demanding long-expired Shell incentive payments to which he was not entitled because he did not complete any of the required construction to which the incentives were directly tied he stopped paying his bills and ceased buying fuel. Ultimately, it was his own business practices that led him to lose the station to the City of Diamond Bar after the station was declared a public nuisance. The City of Dimanod Bar finished construction bringing the station out of its blighted state.”
According to Rene Anabi, co-owner of Anabi Oil, they were pleased with Cummins & White and the outcome of the trial. “We appreciate the hard work involved in this complicated case. The verdict was important to us financially, but also was extremely important for the reputation of Anabi Oil among gasoline distributors and retailers in California.”